The number of overnight stays by tourists in Estonian accommodation establishments has continued to rise since the summer. However, hoteliers are concerned that profitability remains low and that Estonia tends to be outcompeted on the market by Latvia, where prices for tourists are significantly lower.
This November, eleven percent more tourists stayed overnight in Estonian accommodation establishments than during the same month last year. There has been a continued increase in overnight stays since the summer.
“If we look at the results for the year, overnight stays by foreign tourists are still 15 to 17 percent below the 2019 figures, but the situation has improved compared to last year. The first half of the year was more difficult, but the second half has been better, and I believe that December’s figures will be even more positive than November was,” said Killu Maidla, CEO of the Hotels and Restaurants Association.
The statistics are optimistic, but unfortunately the amount of profit made per tourist remains low and the price increases due to the VAT rises will also exacerbate the problem.
“There is little profitability. Our concern is that we are competing with a lot of countries. Right next to us is Latvia, which has cheaper accommodation prices and perhaps the cheapest accommodation prices in Europe. Riga also has better flight connections,” Maidla said.
“The statistics show an increase in the number of visitors, but unfortunately our economic situation means that while people are traveling , they are staying for shorter and shorter periods. If we look at the number of overnight stays, which is important when it comes to tourist accommodation, it doesn’t show a very big increase. In Pärnu, after eleven months, we are at exactly the same point as last year,” said Andrus Aljas, manager of Estonia Spa Hotels.
Pärnu hoteliers are particularly concerned about the decline in the number of Finnish tourists. According to Aljas, the number of overnight stays by Finns was down 15 percent this November with an even bigger drop in December.
In addition to their Latvian counterparts, Estonian hotels are having to compete with so-called “home stays,” where the number of users grew faster than the number of hotel guests.
“The trend is that overnight stays with Airbnb have recovered more than hotel stays. Undoubtedly this competition is important. Unfortunately, we don’t have very accurate data regarding how many of these rental properties we have in Estonia. We are waiting for action from the government to get a better overview of these rentals and also to collect more tax revenue from them,” Maidla said.
Maidla believes that the statistics for 2024 will be slightly better than the year before, though profitability is still a big problem.
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